America’s energy renaissance will transform China as well

Allister Heath was Editor of City A.M. for six years up until June 2014.

Allister Heath

SOMETHING extraordinary is happening to the global economy, with huge implications for geopolitics and international flows of trade and capital. The United States has engineered an energy renaissance: while it currently imports 20 per cent of its total energy consumption, much of it from the Middle East, America will become roughly self-sufficient in net terms by 2035, as a result of rocketing output of oil, shale gas and bioenergy, and improved efficiency by consumers.

As if this were not astonishing by itself, falling US oil imports mean that North America is set to become a net oil exporter by around 2030, in just 18 years’ time. The United States is even projected to become the largest global oil producer within the next few years, exceeding Saudi Arabia for a period that is expected to last until the mid-2020s. It wasn’t what you were taught at school, to be sure. Few stories are more important than this, especially in the context of the UK’s own confused, erratic and short-sighted energy policy.

Somewhat less surprisingly, but equally importantly, the shift in economic activity from West to East means that non-OECD countries will account for 65 per cent of all energy consumption by 2035, up from 55 per cent in 2010. China will be the largest global energy user, with its demand rising 60 per cent by 2035, followed by India (where demand is set to explode by over 100 per cent) and the Middle East. OECD energy demand in 2035 is expected to end up just three per cent higher than in 2010.

All of these predictions and figures come from the World Energy Outlook 2012, the bible in such matters, released yesterday. It is testament to the paucity of our debate surrounding energy in the UK that very little of this is common knowledge. Increasingly, it will be China and Asian nations, not America, which will depend on Middle Eastern resources; it is they who will begin to have an incentive to ensure stability in that region. This suggests a more assertive China internationally over the next decade, and a possible US retrenchment. This shift is crucially important. It is time the City and the UK political establishment woke up to it.

BBC IN CRISIS
An outsider must be hired to run the BBC. All of the candidates being lined up are long-standing executives who have spent years climbing the greasy, bureaucratic pole; but to appoint internally in the current circumstances would be wrong. Outsiders with fresh ideas who are not bogged down by the troubled organisation’s ways of doing things are often the best solution in times of corporate crisis. The role of director general should be split, replaced by a CEO tasked with running the corporation as a business, as well as by an editor-in-chief in charge of supervising all content, news as well as other forms of programming. The former needs to be a formidable business executive; the latter a distinguished, experienced and independent-minded journalist.

ABU QATADA REPRIEVED AGAIN
It is a disgrace that radical cleric Abu Qatada has been granted bail. This saga has been ongoing for years and never seems to end, with lawyers the only winners. Our democratically elected government is not in control of criminal justice. We need a new bill of rights to protect human rights while allowing sensible law enforcement. It is shocking that the coalition has done nothing about this.